United States District Court, W.D. North Carolina, Statesville Division
D. WHITNEY CHIEF UNITED STATES DISTRICT JUDGE
MATTER is before the Court on Plaintiff's Motion for
Summary Judgment, (Doc. No. 34), and Defendant's Motion
for Summary Judgment. (Doc. No. 38). At oral argument on
February 4, 2019, the Court orally granted Defendant's
Motion for Summary Judgment as to Plaintiff's unfair and
deceptive trade practices claim and deferred ruling on the
remainder of Plaintiff's claims. For the reasons stated
below, the remainder of Defendant's Motion for Summary
Judgment is GRANTED and Plaintiff's Motion for Summary
Judgment is DENIED.
case involves a dispute over whether damage to the east wall
of Plaintiff's house was covered by Plaintiff's
property insurance policy. The following facts are undisputed
by the parties. Plaintiff's house was constructed in
1999, (Doc. No. 36-5, p. 6), and consists of two levels: a
basement level and a main level. (Doc. No. 37, p. 1).
Throughout the relevant time period, Plaintiff's home has
been covered by a State Farm North Carolina homeowners
insurance policy (“the Policy”). Id.
2009, Plaintiff made a claim for damage relating to water
intrusion around windows on the east wall. Id. at 2.
A State Farm inspection on May 19, 2009 noted evidence of
long-term water intrusion, but Defendant denied the claim
because the home insurance policy excluded damage from, among
other things, “constant and repeated seepage and
leakage of water.” Id. In 2013, Plaintiff
noticed significant water intrusion into the basement level
of the home during heavy rains. Id. Following this
incident, State Farm investigated, found that the water had
entered the home from an overburdened foundation drain line,
and denied Plaintiff's claim because the policy excluded
coverage for damage from faulty or inadequate design of the
home's drainage system. Id. at 3. These previous
denials of coverage are not at issue in this case.
point between 2013 and 2014, Plaintiff hired a window
contractor who observed decay in the wooden framing
structures of the windows on the east wall of the house.
Id. Plaintiff replaced the windows, but water
continued to intrude into the wall cavity to cause ongoing
decay and damage. Id. In August 2014,
Plaintiff's construction consultant, Perry Culpepper,
inspected the east wall of the home. Id. Culpepper
noted that the living room window header had sagged by one
inch and the exterior basement door was difficult to open due
to sagging above it. Id. Culpepper determined that
the entire east wall needed to be replaced due to rot and
degradation of the interior wall framing. Id. at 4.
September 22, 2014, Plaintiff filed the claim at issue in
this case, stating that the wall was in “imminent and
immediate threat of collapsing” due to decay from water
intrusion and seeking coverage under the Policy. Id.
State Farm retained a structural engineer, Brian Cone, to
inspect the home on October 2, 2014. Id. at 5. State
Farm denied the claim in November 2014, relying on exclusions
in the Policy relating to “collapse and exclusions for
deterioration, settling, shrinking bulging or expansion of
bulkheads and walls, wet or dry rot, faulty, inadequate or
defective maintenance or materials.” Id.
Plaintiff requested a reconsideration of her claim on
December 10, 2014, stating that Cone had recommended that she
refrain from opening the basement door for fear of the entire
wall collapsing. Id. Defendant later reaffirmed its
denial on Plaintiff's claim. Id.
inspected the east wall of the home again in January 2015.
Id. Culpepper noted that the living room window
header had sagged an additional one-eighth of an inch from a
previous visit. Id. Culpepper recommended
significant structural repairs to the wall and advised that a
delay in making repairs could lead to the wall's
collapse. Id. Also in January 2015, Plaintiff heard
a popping noise while staying in the house and discovered
that a piece of molding above a main level window had popped
off the wall. Id. at 5-6. Plaintiff subsequently
provided Defendant with Culpepper's revised report and
informed Defendant of the detached molding. Id. at
6. Defendant informed Plaintiff that its position on coverage
had not changed. Id.
November 23, 2015, Plaintiff contacted Defendant informing
them that the condition of the home had worsened after a
series of heavy rains in the area. Id. Plaintiff
informed Defendant of her intention to repair the home and
gave Defendant an opportunity to examine the wall components
before repair. Id. Defendant's inspector, Brian
Cone, inspected the wall again on December 3, 2015.
Id. On this inspection, portions of drywall had been
removed and the interior of the wall was visible.
Id. Cone observed wood root and staining around the
windows and stated that the damage was consistent with
long-term water intrusion. Id. Cone recommended that
Plaintiff retain a professional structural-design engineer to
provide shoring recommendations until repairs were
completed. Id. at 7-8. Plaintiff's wall
was repaired between March and November 2016. Id. at
7. In November 2016, Plaintiff once again requested
reconsideration of her claim, but it was denied. Id.
subsequently filed suit in this court. Plaintiff's
lawsuit consists of four claims: 1) a declaratory judgment
that Plaintiff's damages were covered under the
Policy's provisions for “collapse, ” 2) an
alternative declaratory judgment that the
“collapse” provisions in the Policy are
ambiguous, 3) a breach of contract claim for Defendant's
failure to pay the covered claim, and 4) a claim for unfair
and deceptive trade practices under North Carolina law.
(See generally Doc. No. 1). Defendant moves for
summary judgment on all of Plaintiff's claims. (Doc. No.
38). Plaintiff moves for summary judgment on the first three
claims, but argues that there is a triable issue of fact as
to the last claim. (Doc. No. 43, p. 2).
Summary Judgment Standards
judgment is appropriate if the movant shows that there is no
genuine dispute as to any material fact in the case.
Fed.R.Civ.P. 56(a). A party seeking summary judgment
“bears the initial responsibility of informing the
district court of the basis for its motion, and identifying
those portions of the [record] which it believes demonstrate
the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once the moving party has met its burden, the burden shifts
and the non-moving party must then “set forth specific
facts showing that there is a genuine issue for trial.”
See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P.
“rest[ing] upon the mere allegations or denials of [a
plaintiff's] pleadings” is insufficient to survive
a properly made and supported motion for summary judgment.
Id. at 586 n.11. Instead, the non-moving party must
adduce affirmative evidence, by means of affidavits or other
verified evidence, showing that a genuine dispute of material
fact exists. See id. at 586-87. “Although the
court must draw all justifiable inferences in favor of the
nonmoving party, the nonmoving party must rely on more than
conclusory allegations, mere speculation, the ...